Apartment market tops houses under hammer

Mac Rundle and Josh Summers are trying to work their way up to owning a house. Picture: Andrew Henshaw

MELBOURNE apartment owners have toasted a rare win over house sellers under the hammer as huge prices lock buyers out of that market.

Competition for units has also been boosted after the introduction of stamp duty concessions for first-home buyers, making the sub-$600,000 bracket a battleground, according to industry players.

Melbourne’s apartment clearance rate was a strong 75 per cent last weekend, ahead of houses at 72 per cent, REIV data shows.

WBP Group chairman Greville Pabst said buyers were turning their sights to apartments after being priced out of contention for houses.

WBP Group chairman Greville Pabst.

“Affordability has certainly been the driver because people still want to live close to their workplace and close to lifestyle attributes … (with) apartments you still get to enjoy being close to those things but with a much lower price entry point,” he said.

“So I think the change that we’re seeing in the market is that shift to apartments and I think that’s going to continue because of affordability.”

Mr Pabst said the sub-$600,000 bracket was “the hardest sector to buy in.”

First-home buyers do not have to pay stamp duty on purchases up to that amount, with concessions up to $750,000 since July 1.

Empty nesters are also competing for the city’s apartments with money to spend after cashing in on the family home.

Real Estate Institute of Victoria chief executive Gil King said Melbourne’s apartment market had performed strongly for the past year with price growth in the inner and middle rings.

The two mates are renovating a villa unit to live in with their girlfriends. Picture: Andrew Henshaw

“Older style apartments in desirable inner-city areas are highly sought-after by owner-occupiers and investors, often because they are larger than newly built properties,” he said.

Advantage Property Consulting director Frank Valentic said buyers could still get into the unit market at a similar price point to four years ago — while house prices had skyrocketed.

“There are now opportunities to buy at yesterday’s prices almost,” he said.

Young buyers Mac Rundle and Josh Summers are holding on to the dream of house ownership, though, having bought a villa unit in East Bentleigh to renovate and live in with their girlfriends.

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